Engro Corporation announces its financial results for the quarter ended March 31, 2023

KARACHI: Engro Corporation (PSX: ENGRO) announced its financial results for the quarter ended March 31, 2023.

Overview of Financial Performance

Engro Corporation’s standalone revenue for the first quarter was PKR 6.4 bn – down by 21%, primarily due to lower dividends received from Engro Polymer & Chemicals Limited (EPCL) due to reversal of commodity cycle and increase in gas prices. Correspondingly, the Company posted a 12% decline in PAT of PKR 6 bn in Q1 2023 against PKR 6.9 bn in Q1 2022.

On a consolidated basis, Engro Corporation’s revenue grew by 10% to PKR 97.3 bn in Q1 2023 from PKR 88.3 bn in Q1 2022. The Company posted a PAT of PKR 8.8 bn in Q1 2023, which is 41% lower than PKR 14.9 bn in Q1 2022. The PAT attributable to the shareholders is PKR 5 bn, translating into an EPS of PKR 8.18 per share (Q1 2022: PKR 13.84 per share). Major variance was attributable to the macroeconomic headwinds resulting in commodity cycle reversal, lower DAP demand and increasing cost pressures.

Dividend Declaration

During the first quarter Board meeting, the directors conducted a comprehensive analysis of the investment opportunities available, prevailing economic situation including but not limited to the prohibitive cost of capital and challenges on import of plant, machinery and raw materials, and the capital structure of the Company. After extensive deliberation, the Board concluded that keeping in view the current circumstances, the most optimum utilization of cash was to pay dividends to shareholders, as a result the Board decided to declare a PKR 40.0 per share dividend.

It is worth noting that this decision will not have a significant impact on long-term investment program of the Company which will continue to be funded by retaining future dividends and/or capital reallocation. Within its long-term investment program, Engro will continue to strive for global competitiveness within the businesses it operates and continue to explore opportunities for increasing exports and international footprint.